Developing effective Company Regulations is not just about writing rules, it is key to creating a harmonious work environment and maintaining smooth operations.
This task can be challenging, especially if it’s your first time doing it. PPs are not just a guide for employees, but also a shield that protects the company from legal risks.
Therefore, it is important to draft it carefully and pay attention to every relevant detail. But, don’t worry!
You don’t have to face this task alone.
This article will provide a complete guide to drafting company regulations that are not only clear and easy to understand, but also effective in implementation.
Let’s take a look at the following explanation!
What it is Company Regulation (PP)?
Based on Article 1 point 20 of the Manpower Law Article 1 point 1 of Permenaker 28/2014, company regulations are regulations made in writing by employers and contain working conditions and company rules. This rule must be applied to all workers in the company, both at the head office and branches, and applies to workers with a Specified Time Work Agreement contract. (PKWT) and Indefinite Time Work Agreement (PKWTT).
Why Company Regulations (PP) is Important?
Before discussing how to draft a PP, it is important to understand the reason behind the need.
PPs have the following important roles:
- Shared Guidelines: These regulations provide clear guidance to all company members on what is expected and how to behave in the work environment.
- Conflict Prevention: With clear rules in place, companies can prevent misunderstandings and conflicts, both between employees and between employees and management.
- Improves Productivity: A structured and organized work environment allows employees to work more focused and efficiently.
- Maintaining Quality: Regulations ensure that all activities in the company are in accordance with established standards.
Benefits of Having Company Regulation (PP)
PP is not just a formality, rules serve as an important foundation for orderly and harmonious operations.
Here are some of the benefits of having valid rules in the company:
- Provide certainty of rights and obligations between employers and workers/laborers.
- To be a means of improving the welfare of workers/laborers and their families.
- Serves as an instrument for resolving grievances at the employer and worker/labor level.
- Regulate the implementation of work relations between employers and workers/laborers and among workers/laborers.
- Achieve peace of mind at work and peace of mind in business.
- Avoid potential conflicts or disputes in the employment relationship.
Obligation to make PP
Based on Law No. 13 Year 2003 on Manpower, every company that employs at least 10 workers or laborers is required to have a PP.
However, this obligation does not apply to companies that already have a PP. Collective Labor Agreement (CLA).
Masa berlaku aturan perusahaan adalah maksimal 2 tahun dan harus diperbarui setelah masa berlaku habis.
Unfortunately, there are still many companies that have not fulfilled this obligation or do not update regularly.
It is important to remember that making PP is not just a formality, but a form of compliance with applicable laws in Indonesia.
With clear and comprehensive rules, companies can regulate various important aspects such as wage payment procedures, working and rest time arrangements, leave procedures, and retirement age limits, thus creating an orderly and conducive work environment.
Contents of Company Regulation (PP)
Based on Article 2 paragraph (2) of Permenaker 28/2014, there are six main components that must be contained in company regulations:
- Rights and obligations of employers
- Rights and obligations of workers
- Working conditions
- Company rules
- Period of validity
- Matters that constitute further arrangements of laws and regulations
Additional Provisions in Company Regulation (PP)
In addition to the basic provisions above, there are several additional provisions that can be regulated in the PP, including:
- Provisions regarding termination of employment or expiration of employment agreement.
- Arrangements regarding working hours.
- Provisions for the implementation of annual leave and long breaks.
- Rules for menstrual leave for female workers who experience pain.
- Facilities for breastfeeding during working hours, subject to space availability and company policy.
- Provisions for payment of wages in situations where workers or laborers are unable to work due to reasons that have been regulated by law.
Steps to Develop an Effective PP
Developing effective company regulations requires special attention and the involvement of various parties to ensure that the results meet the needs of the company and employees.
Here are the important steps that you need to consider in the PP drafting process:
Identify Company Needs
The first step is to identify the needs of the company and employees, this can be done through surveys or discussions with management and employees.
This process helps determine the important aspects that need to be regulated in the PP.
Keep in mind that Law No. 13/2003 on Manpower requires companies to take into account suggestions and considerations from worker/labor representatives in drafting the PP.
Drafting Draft and Consultation
Once the needs have been identified, the next step is to develop draft PP that covers all important aspects relevant to the company’s operations.
It is important to consider various perspectives so that the resulting regulation is comprehensive.
Prior to enactment, consultation with employees is essential.
This consultation ensures that the regulations made are in line with the needs and working conditions of the employees, thus increasing their acceptance of the regulations to be enforced.
Endorsement and Socialization
Once the draft company regulation has been completed, the employer must submit the draft to the workers’ representative for advice and consideration.
This process must be completed within 7 working days from the time the draft is received by the workers’ representative.
If no suggestions or considerations are given within this period, the employer can directly apply for the ratification of the PP to the competent authority along with proof of the request for suggestions and considerations.
This ratification can be done by the company’s management or through a general meeting of shareholders.
The ratification of company regulations is regulated in Article 112 of Law Number 13 Year 2003 on Manpower.
The last step that is no less important is the socialization of company regulations to all employees.
Law Number 13 of 2003 concerning Manpower requires companies to notify and explain the contents and provide a copy of the PP to workers/laborers.
This socialization can be done through training, meetings, or distribution of regulatory documents.
Engage the Help of Legal Contract Professionals
Developing effective company rules is no easy task, but with the right steps, it can be done well.
Starting from understanding the company’s objectives, involving relevant parties, to ensuring the rules are in accordance with applicable laws, are all important steps to creating effective rules.
Don’t forget, good communication and implementation also play a key role.
If you find it difficult or need help in drafting company regulations, you can use the services of making company regulations from Kontrak Hukum.
With its experience and expertise,
